I think the cities built in giant migrating trees would be very hard to realise in a video game. I can't quite picture how they could take a tree and then build a city in it and also not using any timber for structures (since Bosmer can't cut their trees). It would have to be very organic, pieces of the living tree would have to form the homes, businesses, temples and palace.
They got only one tree and it seems toi be rooted for the next few decades. I'm a big Bosmer lore buff and I really like to see a well done Valenwood game. More interesting would be Valenwood/Elsewyr skirmishes but with the refounding of the Aldmeri Dominion that sort of stopped

A Dance In Fire is indeed a great series to read to learn more about Bosmer and Valenwood.
I think there was an Oblivion mod that added Valenwood.
Arena is your official answer, though.
That mod was never finished but some of us joined a new Skyrim project that should feature a Valenwood island down the line.